Employers considering implementing noncompetition and nonsolicitation agreements for their California workforce must understand the differences in these agreements, and California’s public policy against restraints against an employee’s ability to work in their profession or trade.  This Friday’s Five covers the top five issues employers must know about noncompetition and nonsolicitation agreements in California.

1. Noncompetition and nonsolicitation agreements cannot violate Business & Professions Code section 16600

In California, noncompetition agreements are governed by Business & Professions Code section 16600, which states: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The statute permits non-competition agreements in the context of sale or dissolution of corporations (§ 16601), partnerships (§ 16602), and limited liability corporations (§ 16602.5).  But other than these narrow exceptions connected with the sale or dissolution of a company, California has a strong public policy against non-competition agreements.

Under the common law, as still recognized by many states today, contractual restraints on the practice of a profession, business, or trade, were considered valid, as long as they were reasonably imposed.

2. California Supreme Court ruling in Edwards v. Arthur Andersen regarding non-competition agreements

In 2008, the California Supreme Court ruled on the enforceability of non-competition agreements under California law in Edwards v. Arthur Andersen LLP. Arthur Andersen argued that California courts have held that section 16600 embraced the rule of reasonableness in evaluating competitive restraints.

The Court disagreed with Arthur Andersen and held that the non-competition agreement at issue was invalid under California law because the agreement prohibited the employee from performing professional services for any client he worked with at Arthur Andersen for a 18-month period.  It also prohibited the employee from soliciting any client of Arthur Andersen’s Los Angeles office.  The Court held that these prohibitions restricted the employee’s ability to practice his accounting profession, and therefore was unenforceable under California law.

3. California Supreme Court refused to recognize the “narrow-restraint” exception in non-competition agreements

Arthur Andersen argued that section 16600 has a “narrow-restraint” exception and that its agreement with Edwards survives under this exception because the restraints against the employee were narrow and reasonable.  Arthur Andersen maintained that the federal court in International Business Machines Corp. v. Bajorek (9th Cir. 1999) upheld an agreement mandating that an employee forfeits stock options if employed by a competitor within six months of leaving employment.  It also noted that a Ninth Circuit federal court in General Commercial Packaging v. TPS Package (9th Cir. 1997) held that a contractual provision barring one party from courting a specific customer was not an illegal restraint of trade prohibited by section 16600, because it did not “entirely preclude[]” the party from pursuing its trade or business.

In rejecting Arthur Andersen’s argument, the California Supreme Court refused to recognize the “narrow-restraint” exception for noncompetition agreements in California:

Contrary to Andersen’s belief, however, California courts have not embraced the Ninth Circuit’s narrow-restraint exception. Indeed, no reported California state court decision has endorsed the Ninth Circuit’s reasoning, and we are of the view that California courts “have been clear in their expression that section 16600 represents a strong public policy of the state which should not be diluted by judicial fiat.” [citation] Section 16600 is unambiguous, and if the Legislature intended the statute to apply only to restraints that were unreasonable or overbroad, it could have included language to that effect. We reject Andersen’s contention that we should adopt a narrow-restraint exception to section 16600 and leave it to the Legislature, if it chooses, either to relax the statutory restrictions or adopt additional exceptions to the prohibition-against-restraint rule under section 16600.

4. Customer nonsolicitation agreements

There are two types of non-solicitation agreements: one that restricts the employee’s ability to solicit customers and another that restricts the employee’s ability to solicit employees (see item #5 below).

Regarding customer non-solicitation agreements, as set forth above, the California Supreme Court in Edwards v. Arthur Andersen ruled that a prohibition on a former employee’s solicitation of clients was an invalid restraint on the employee’s ability to pursue his trade or business.  Similarly, in 2009, a California appellate court in Dowell v. Biosense Webster, Inc. held that a broadly worded non-solicitation clause that prohibited an employee for a period of 18 months postemployment from soliciting any business from, selling to, or rendering any service directly or indirectly to any of the accounts, customers or clients with whom they had contact during their last 12 months of employment was void under section 16600.  In Dowell, the court rejected the employer’s argument that the agreement was enforceable under the trade secret exception because it found the non-solicitation provision was “not narrowly tailored or carefully limited to the protection of trade secrets, but are so broadly worded as to restrain competition.”

5. Employee nonsolicitation agreements

Employee non-solicitation clauses can also be found to violate section 16600 if drafted too broadly and it in effect becomes an invalid restraint on the employee’s ability to work in their profession or trade.  The court in Loral Corp. v. Moyes (1985), ruled that the agreement at issue was more of a “noninterference agreement” between the employer and former employee and upheld the employer’s non-solicitation provision.  The ruling upheld an agreement that prevented the former employee from soliciting employees from the employer, and, even though the agreement did not have a time limitation, the court interpreted the agreement to apply a one-year limit.

However, in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018), a California court of appeal held that employee non-solicitation to be an invalid restrain on trade.  The court explained:

Indeed, the broadly worded provision prevents individual defendants, for a period of at least one year after termination of employment with AMN, from either “directly or indirectly” soliciting or recruiting, or causing others to solicit or induce, any employee of AMN. This provision clearly restrained individual defendants from practicing with Aya their chosen profession— recruiting travel nurses on 13-week assignments with AMN.

The ruling in AMN Healthcare arguably overturned decades of decisions, such as Loral, upholding employee non-solicitation agreements.  However, some have argued that AMN Healthcare is a unique case with a limited holding – since the issue delt with employees who were professional recruiters, and therefore baring them from recruiting employees would be more impactful on their ability to continue to work in their chosen profession.  Nevertheless, AMN Healthcare raises doubt about whether employee non-solicitation provisions can be enforced in California.

California employers are cautioned to carefully review all agreements that restrict former employees’ ability to compete and solicit customers and employees to ensure the restrictions do not violate California’s strong public policy in allowing employees to perform their chosen profession or trade.

As we begin March, there are many developments for California employers on the legal front.  Here are five issues that should catch employer’s attention this week (and will likely have impacts on California employers for the rest of the year):

1. Does California’s Private Attorneys General Act (PAGA) Survive 2022?

PAGA was designed by the California Legislature offer financial incentives to private individuals to enforce state labor laws by recovering certain civil penalties.  Aggrieved employees can seek recovery of civil penalties for Labor Code violations they suffered, in addition to penalties for all Labor Code violations by the employer in a representative action, as long as the employee suffered by at least one violation. 75% of the collected penalties must be distributed to the Labor and Workforce Development Agency, and the remaining 25% is to be distributed among the employees affected by the violations, and a prevailing plaintiff is entitled to their fees and costs.  PAGA claims are representative actions, which are distinct from class actions.

On one front, PAGA is being challenged in the courts.  On December 15, 2021, the U.S. Supreme Court granted certiorari in Viking River Cruises, Inc. v. Moriana.  At issue in this case is whether a California employer may enter into an arbitration agreement with an employee whereby the employee agrees to only bring his or her individual claims in an arbitration proceeding and not bring any class or representative claim under PAGA.  If the U.S. Supreme Court holds that employees may waive the ability to bring PAGA claims in arbitration agreements, it would deal a large blow to PAGA.  Such a ruling would prohibit many PAGA cases where the employee entered into an arbitration agreement with the employer waiving the ability to bring PAGA representative claims.  Oral argument is set for March 30, 2022, and a decision is expected in summer of 2022.  More information about Viking River Cruises and PAGA can be read here.

On the other front, PAGA is being challenged by the voters of California.  California Fair Pay and Employer Accountability Act seeks to replace PAGA.  The initiative is at the stage of gathering enough signatures in order to be placed on the November 2022 ballot.  If passed, the initiative would provide employees with 100% of the penalties collected, instead of only 25% that is currently provided to the employees, prohibit attorneys’ fees from being awarded in these cases, and double the penalties against employers who willfully violate the law.  More information about the initiative can be found at Californians for Fair Pay and Accountability here.

2. Face Mask Requirements Lifted in Los Angeles

Today, March 4, 2022, the County of Los Angeles lifted requirements for people to wear face masks indoors within the County.  The new order states that masks are strongly recommended, but not required, for all persons, regardless of vaccine status, in indoor public settings and businesses.  Masks are continued to be required for indoor settings with higher risks for transmission, such as: Public Transit, Transportation Hubs, All Healthcare Settings, including Long Term Care and Adult and Senior Care Facilities, Correctional Facilities and Detention Centers, Homeless Shelters, and Emergency Shelters.

3. City of Los Angeles Still Requiring Proof of Vaccination Status

Despite the State and many local cities relaxing the COVID-19 protocols, under SafePassLA, City of Los Angeles still requires patrons of certain locations to demonstrate proof of vaccination before entering indoor spaces and large outdoor event within the City of Los Angeles.

4. California Labor Commissioner Cites Resort in Rancho Palos Verdes for $3.3 million for violating COVID-19 right to recall law.

Terranea Resort was cited for violating California’s “Right to Recall” law for failing to offer 53 employees positions once the resort re-opened after the pandemic.

Labor Code section 2810.8 requires employers in the hospitality industry and building services to offer employees their positions back if they were separated from employment as a result of the COVID-19 pandemic.  The law applies to hotels and private clubs with 50 or more guest rooms, public and private event centers, airport hospitality operations and service providers.  It became effective on April 16, 2021 and does not expire until December 31, 2024.  More information about Labor Code section 2810.8 can be found at the DIR’s website here.

5. California’s Pay Data Reporting Deadline of April 1 Quickly Approaching

California employers of 100 or more employees must report pay and hours-worked data by establishment, job category, sex, race, and ethnicity to the Department of Fair Employment and Housing (DFEH) annually.  Employers are required to report this data to the DFEH by April 1, 2022.  As a reminder, SB 973, passed in September 2020 that created a new obligation for California employers to annually submit pay data report to the DFEH.  The DFEH published a frequently asked questions page clarifying some questions and providing resources on how to prepare and report this data.  Our prior article covering which employers must comply with the reporting requirements is found here.

California and local governments are taking steps this week to eliminate the indoor mask requirement.

On the state level, on February 28, Governor Newsom signed an order updating the Cal/OSHA ETS and suspending the portion of the  ETS requiring employers to provide face coverings and ensure they are worn when indoors or in vehicles to employees who were not fully vaccinated. The Governor’s office stated, “In California, starting March 1, masks will no longer be required for unvaccinated workers indoors, consistent with the updated CDPH guidance, but will be strongly recommended for all individuals in most indoor settings. Employers must still provide a face covering upon request of an employee.”

Today, March 1, 2022, Cal/OSHA updated its website and removed FAQ #1 under Face Covering and Other Controls in its document titled “COVID-19 Emergency Temporary Standards Frequently Asked Questions.”  The removed FAQ required employers to “provide employees who are not fully vaccinated with face coverings and to ensure they are properly worn over the nose and mount when indoor and in vehicles.”  This brings Cal/OSHA into alignment with the California Department of Public Health’s (CDPH) updated guidance for the use of face masks that applies across California.  The CDPH’s updated guidance sets forth, “[e]ffective March 1, 2022 , the requirement that unvaccinated individuals mask in indoor public settings will move to a strong recommendation  that all persons, regardless of vaccine status, continue indoor masking.”  Masking requirements still are in effect for specified high-risk settings, such as health care facilities, public transit (such as airports, taxis), correctional facilities, and at homeless shelters, and long-term facilities.

In addition, Los Angeles County is likely to eliminate its indoor mask requirement this Friday, March 4, 2022.  NBC reports, “Los Angeles County Public Health Director Barbara Ferrer said Tuesday the county is prepared to issue a revised health order on Thursday, effective Friday, dropping the indoor mask mandate.”

For now, employers need to continue to abide by Los Angeles City and County masking requirements and watch for updates this Thursday for the potential changes to take place on Friday.

Los Angeles City joined the County’s easing of wearing masks indoors today, February 25, 2022.  Mayor Garcetti made the announcement that brought the City into alignment with the County in a tweet today:

 

Los Angeles County’s order can be viewed here, and Los Angeles City’s order can be viewed here.  Here are the top five issues employers must understand about the orders easing the masking requirements:

1. Covered establishments

The County and City orders ease the indoor mask requirements for the following entities/venues:

All indoor public settings, venues, gatherings, and public and private businesses (some examples: offices, manufacturing, warehouses, retail, food and beverage services, theaters, family entertainment centers, meetings, and state and local government offices serving the public, and Indoor Mega Events, among others).

2. Entities may choose between two options to allow fully vaccinated persons to be exempt from the indoor masking requirement.

The orders provide the following two options:

Option #1 – To allow both fully vaccinated customers/visitors and fully vaccinated onsite workers to unmask while indoors if they verify proof of full vaccination or a recent negative test for everyone age 5 or older and all onsite workers prior to entering.

Option #2 – To allow fully vaccinated customers and visitors to unmask while indoors, while all onsite workers, including contractors, remain masked, the entities must verify proof of either full vaccination or a recent negative test for all customers and visitors age 5 or older.  All onsite workers must remain masked while indoors under this option.

3. Employers must offer masks to employees under option #2.

Employers utilizing option #2 above must offer at no costs to all employee a well-fitting respirator (N95/KN95/KF94).  Employers must follow all regulations regarding providing masks to employees, including all requirements under the Cal/OSHA Emergency Temporary Standard (ETS).

4. Individuals do not need to meet the vaccination or negative test verification requirements to inter indoor facilities, as long as they are wearing a well-fitting masks.

5. Employers must still comply with Cal/OSHA ETS masking requirements.

Generally, the Cal/OSHA ETS requires employers to provide employees who are not fully vaccinated with face coverings and to ensure they are properly worn over the nose and mouth when indoors and in vehicles.  Face covering are not required outdoors, regardless of vaccination status, unless there is an outbreak.
Employers must also provide and ensure use of face coverings by employees:

  • When required by CDPH,
  • When an employee had COVID-19 or had close contact with a COVID-19 case and returns to work, as explained in the section of this FAQ on CDPH’s Isolation and Quarantine Guidance, and
  • When riding in employer-provided motor vehicle transportation.

More information about the Cal/OSHA ETS mask requirements can be read here.

California’s 2022 COVID-19 Supplemental Paid Sick Leave becomes effective tomorrow, February 19, 2022 (for background and basics about the new law, see our prior post here).  This week, the Labor Commissioner published additional resources just before the law becomes effective.  Below is a summary of the notice requirements (and with a link to the required poster) and a review of the critical issues addressed in the Labor Commissioner’s FAQs published this week to aid employers in meeting their obligations under the new law starting on February 19:

1. The required poster for employers is available on the Labor Commissioner’s website.

The only required notice employers must provide to employees about the new SPSL is through posting a poster developed by the Labor Commissioner.  The poster was published this week and can be found here.  (The Spanish version is here).

Employers who have employee that do not “frequent a workplace,” can satisfy the posting requirement by sending the notice to employees electronically.

2. The Labor Commissioner’s FAQs provide how employees can make requests for retroactive SPSL payments for leave between January 1, 2022 and February 19, 2022.

Employees who have taken leave from January 1, 2022 through February 19, 2022, for one of the reasons covered under the SPSL, the employee may ask for payment for this leave on or after February 19, 2022.  The Labor Commissioner’s FAQ #13 explains:

For example, if a covered employee had to take two hours off for a vaccine appointment on January 15, 2022, the employee can make an oral or written request to the employer to be paid for that time off in January, because it is a qualifying reason for taking 2021 COVID-19 Supplemental Paid Sick Leave.  The oral or written request must be made on or after February 19, 2022. A request made before February 19 does not count.  If an employee is unable to make the request themselves or has difficulty locating an employer to provide proper notice, they may contact the Labor Commissioner’s Office, which may be able to provide assistance.

After the employee makes the request, the employer will have until the payday for the next full pay period to pay the “retroactive” 2022 COVID-19 Supplemental Paid Sick Leave. On that payday, the employer must also provide accurate notice on the itemized wage statement of how many 2022 COVID-19 Supplemental Paid Sick leave hours have been used by the covered employee.

3. The FAQs explain what type of documentation employers may require from employees.

There are a limited number of occasions for when employers can condition the payment of SPSL only if employees provide certain documentation.  FAQ # 19 makes it clear that generally employees do not need to provide documentation to the employer in order to take SPSL.  However, that FAQ explains if the employer learns that the “employee is not requesting 2022 COVID-19 Supplemental Paid Sick Leave for a valid purpose” the employer could reasonably request documentation (but this is a very limited exception that employers must approach with caution).

The FAQs set forth the following the additional circumstances of when an employer may condition payment of SPSL upon documentation from the employees:

  • Employers may ask employees for documentation before paying retroactive payment for SPSL related an employee’s positive COVID test or the employee’s family member’s positive COVID test.

FAQ #14 explains:

… if the employee is requesting retroactive pay for leave that is available only if the employee or qualifying family member was positive for COVID-19, an employer may request documentation. This documentation could include, among other things, a medical record of the test result, an e-mail or text from the testing company with the results, a picture of the test result, or a contemporaneous text or e-mail from the employee to the employer stating that the employee or a qualifying family member tested positive for COVID-19.

  • Employers may ask for documentation before paying SPSL that is only available after a positive test. See FAQ # 20.
  • Employers may ask for documentation when an employee uses more than three days or 24 hours for a single vaccine appointment and recovery from any related side effects. Here, an acceptable request by the employer would be a note from a health care provider that the employee or family member continued to have vaccine side effects. See FAQ #20.

Other than these limited exceptions, employers may not condition the payment of SPSL upon employee providing documentation supporting their request for SPSL.

4. What COVID-19 tests are acceptable under the SPSL?

FAQ #21 provides that “an employee may take an over-the-counter rapid test (Antigen) or a test that is scheduled at a testing facility.  The law does not specify type of test and does not place conditions on how the test is administered in order to qualify for leave.”

5. Employers may count paid sick leave provided under local paid sick leave ordinances towards the 2022 SPSL requirement.

The FAQs permit employers to count leave provided under local ordinances towards the SPSL requirement under certain circumstances.  FAQ # 27 explains:

For example, if an employer provides a full-time covered employee 40 hours of COVID‑19-related supplemental paid sick leave pursuant to a local ordinance, those 40 hours would count toward the employer’s obligations under the 2022 COVID-19 Supplemental Paid Sick Leave law, so long as the leave provided is for a reason listed under the 2022 COVID-19 Supplemental Paid Sick Leave law and is at least at the same rate of pay as this law requires.

As the new law takes effect on February 19, 2022, it is likely that the Labor Commissioner will update the FAQs with further clarifications as employers begin to implement the requirements and additional questions arise.  Employers should review the full FAQs available here, and regularly check for any updates to the FAQs.

On February 9, 2022, Governor Newsom signed a new law requiring employers to provide supplemental COVID-19 paid sick leave in 2022.  The law, SB 114, was passed quickly by the legislature and signed by the Governor.  Unlike the supplemental paid sick leave law passed in 2021, there are no offsetting tax credits for employers to assist with the added costs this new paid sick leave will place on businesses across the state.  Here are five key issues California employers should know about the new law and its related deadlines:

1. The new COVID-19 supplemental paid sick leave law takes effect on February 19, 2022.

The Governor signed the law on February 9, 2022, and therefore the paid sick leave requirement takes effect 10 days after the enactment of the law – February 19, 2022.  The law applies retroactive obligation for employers to pay for qualifying paid sick leave starting January 1, 2022.  The paid sick leave requirement expires on September 30, 2022 (but employees currently using the sick leave can continue its use past the September 30th deadline).

2. Which employers would be covered by the law?

The law applies to employers with more than 25 employees.

3. Which employees are entitled to paid sick leave?

Employers are required to provide employees COVID-19 supplemental paid sick leave if the employee is unable to work or telework due to the following reasons:

  1. The employee is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidance of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local public health officer who has jurisdiction over the workplace.
  2. The employee has been advised by a health care provider to isolate or quarantine due to COVID-19.
  3. The employee is attending an appointment for themselves or a family member to receive a vaccine or a vaccine booster for protection against COVID-19, subject to certain limitations.
  4. The employee is experiencing symptoms, or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster that prevents the employee from being able to work or telework.
  5. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  6. The employee is caring for a family member who is subject to an order or guidance or who has been advised to isolate or quarantine.
  7. The employee is caring for a child whose school or place of case is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
  8. If the employee, or a family member for whom the employee is providing care, tests positive for COVID-19. (Note: employer may condition payment of supplemental paid sick leave for this reason upon the employee providing a positive test for themselves or the family member they are caring for.)

4. How much paid leave is required?

The employee is eligible for potentially up to 80 hours of leave available under two different banks:

  • Bank #1: Employees are entitled up to 40 hours of COVID-19 supplemental paid sick leave for full time employees based on reasons 1 through 7 above.
  • Bank #2: Employees are entitled up to 40 hours of paid leave for reason number 8 listed above (if they or a family member test positive).

Employers will therefore have to implement internal tracking measures to track the reason for the leave and how much of the leave the employee has taken under each of the two banks of leave available.  It is expected that there will be many questions regarding how employers are to account for the various reasons for leave under the two different banks of leave.  Employers will need to consult legal counsel on this and closely monitor any updates from the Labor Commissioner.

Calculating Amount of Leave Available

The law sets forth how employers are to calculate the amount of leave for part-time, variable scheduled employees, and full-time employees.  Employers will need to review the requirements in order to make the appropriate calculations for these different classes of employees.

Calculating Rate of Pay

The law sets forth how employers are to calculate the rate of pay for nonexempt employees, and exempt employees.  Employers will need to carefully review these calculations to ensure the proper rate of pay is being used when an employee takes qualifying paid leave.

Caps on Payments

However, the total paid sick leave is capped at 80 hours for the period between January 1, 2022 to September 30, 2022.  In addition, employers are not required to pay more than $511 per day and $5,110 in the aggregate to an employee (unless federal legislation changes these amounts set forth in the FFCRA).

Interaction with California’s Healthy Workplaces, Healthy Families Act and Cal/OSHA ETS Exclusion Pay, and Local Ordinances

The supplemental paid sick leave is in addition to the paid sick leave employees are entitled to under California’s Healthy Workplaces, Healthy Families Act set forth in Labor Code 246.  Moreover, employers cannot require employees to first exhaust the supplemental paid sick leave before paying exclusion leave required under the Cal/OSHA Emergency Temporary Standards (ETS).  The new California supplemental paid sick leave leaves in place any employer obligation to comply with local paid sick leave requirements, such as those in Los Angeles City and County, Long Beach, and Oakland.

5. Notice and pay stub requirements.

The law requires employers to provide a notice to employees the amount of COVID-19 supplemental paid sick leave that the employee has used through the pay period that it was due to be paid.  This can be provided on the employee’s pay stub or on another writing provided to the employee on the designated pay day.  The employer shall list “zero hours used” if a worker has not used any COVID-19 supplemental paid sick leave.  This requirement takes effect the next full pay period following February 19, 2022.

Employers are also required to post or distribute a notice to employees that will be developed by the Labor Commissioner.  The Labor Commissioner is in the process of updating its website, and will make the posters and FAQs available here.

Other provisions of the law also address firefighters and providers of in-home supportive services employees.

[Update: On February 9, 2022, the Governor signed SB 114 into law – see our updated article here on the new California supplemental paid sick leave requirements enacted by this law].

This week, Assembly Bill 84 (AB 84) was published setting forth the parameters of a proposed law for another COVID-19 supplemental paid sick leave requirement for California employers in 2022.  The Governor and legislature announced last month that they were discussing the framework of the law.  AB 84 gives employers some guidance on the likely COVID-19 supplemental paid sick leave law that will be implemented in the near future.  Here are five key issues California employers should know about the proposed legislation:

1. When will the new COVID-19 supplemental paid sick leave law take effect?

Currently the law has not been enacted, so there are no obligations for employers yet.  However, once the final law is passed and signed by the Governor, it will take effect upon the Governor’s signature.  The law provides that the paid sick leave requirement takes effect 10 days after the enactment of the law and would create a retro-active obligation for employers to pay for qualifying paid sick leave starting January 1, 2022.  The paid sick leave requirement would expire on September 30, 2022.  Given how quickly this new law will likely make its way through the legislature, employers are encouraged to start planning for compliance as soon as possible.

2. Which employers would be covered by the law?

The law would apply to employers with more than 25 employees.

3. Which employees are entitled to paid sick leave?

Employers are required to provide employees COVID-19 supplemental paid sick leave if the employee is unable to work or telework due to the following reasons:

  1. The employee is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidance of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local public health officer who has jurisdiction over the workplace.
  2. The employee has been advised by a health care provider to isolate or quarantine due to COVID-19.
  3. The employee is attending an appointment for themselves or a family member to receive a vaccine or a vaccine booster for protection against COVID-19, subject to certain limitations.
  4. The employee is experiencing symptoms, or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster that prevents the employee from being able to work or telework.
  5. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  6. The employee is caring for a family member who is subject to an order or guidance or who has been advised to isolate or quarantine.
  7. The employee is caring for a child whose school or place of case is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
  8. If the employee, or a family member for whom the employee is providing care, tests positive for COVID-19. (Note: employer may condition payment of supplemental paid sick leave for this reason upon the employee providing a positive test for themselves or the family member they are caring for.)

4. How much paid leave is required?

Employees are entitled to 40 hours of COVID-19 supplemental paid sick leave for full time employees based on reasons 1 through 7 above.  Part-time employees are entitled to a proportional amount based on how many hours they normally work.  Full-time employees are entitled to an additional 40 hours of paid leave for reason number 8 above (a positive test) and part-time employees are entitled to a proportional amount based on their normal hours.  However, the total paid sick leave is capped at 80 hours for the period between January 1, 2022 to September 30, 2022.  In addition, employers are not required to pay more than $511 per day and $5,110 in the aggregate to an employee (unless federal legislation changes these amounts set forth in the FFCRA).  Moreover, employers cannot require employees to first exhaust the supplemental paid sick leave before paying exclusion leave required under the Cal/OSHA Emergency Temporary Standards (ETS).

5. What are employers notice and pay stub requirements?

The law would require employers to provide a notice to employees the amount of COVID-19 supplemental paid sick leave that the employee has used through the pay period that it was due to be paid.  This can be provided on the employee’s pay stub or on another writing provided to the employee on the designated pay day.  The employer shall list “zero hours used” if a worker has not used any COVID-19 supplemental paid sick leave.  This requirement would take effect in the next full pay period following the date the law becomes effective.

Employers will also be required to post or distribute a notice to employees that would be developed by the Labor Commissioner.

Cal/OSHA Emergency Temporary Standards (“ETS”) apply to most workplaces in California, with very few exceptions.  Enacted in November of 2020, the ETS sets requirements for California employers related to COVID-19 protocols for exposures at the workplace and measures to take if employees are exposed to or catch COVID-19 at the workplace.  We have written about the ETS extensively before, but wanted to focus on five common questions we are seeing from employers about the ETS and the recent revisions to the ETS that took effect on January 14, 2022:

1. Which employers are covered by the ETS?

The ETS applies to all employers, employees, and places of employment with the following exceptions:

  • Work locations where there is only one employee who does not have contact with other people.
  • Employees who are working from home.
  • Employees who are covered by the Aerosol Transmissible Diseases regulation (Cal. Code Regs., tit. 8, § 5199) (section 5199).
  • Employees working from a location chosen by the employee that is not under the control of the employer (for instance, an employee teleworking from a café or a friend’s home).

2. Does an employer need to pay exclusion pay if the workplace is closed because of COVID-19 or any other reason?

Cal/OSHA’s updated FAQs (available here: https://www.dir.ca.gov/dosh/coronavirus/ETS-FAQ2_01.24.2022-AF.pdf) provides that if the business closes, exclusion pay is not required.  The FAQs state: “No, the employer need not maintain the exposed employee’s earnings and benefits if the excluded employee is unable to work because of reasons other than exposure to COVID-19 at work (e.g., a non-work exposure, business closure, caring for a family member, disability, or vacation). Such employees may be eligible for other leave, including sick leave, or other benefits such as Disability Insurance, Paid Family Leave, or Unemployment Insurance Benefits.”

3. Are at-home tests acceptable for employee testing requirements?

Cal/OSHA accepts home-based testing and explains:

To comply with the testing requirements of the ETS, over-the-counter (OTC) tests may not be both self-administered and self-read unless observed by the employer or an authorized telehealth proctor. This independent confirmation can be accomplished in multiple ways. For example, the employer can validate the test through the use of a proctored test that is supervised by a licensed, authorized telehealth provider via video proctoring, or by a point-of-care test provider. Alternatively, the employer could proctor the OTC test itself, including by video. Another option to meet the requirement that a test is not “self-read” is to use an OTC test that features digital reporting of date and time stamped results. These tests do not require observation by an employer or telehealth proctor.

See Question #2 on page 11 – https://www.dir.ca.gov/dosh/coronavirus/ETS-FAQ2_01.24.2022-AF.pdf

4. Can employers require employees to use paid sick leave in lieu of exclusion pay?

Employers may not require employees to use their California paid sick leave provided under Labor Code section 246, but may require the employees to use any other paid sick leave that is in addition to the California paid sick leave requirements.  The FAQs state the following: “Employers that provide a paid leave policy that is separate and in addition to the paid sick leave policy required by California’s Paid Sick Leave law (section 246 of the Labor Code) may require their employees to use that separate sick leave as permitted by law. However, an employer cannot require the employee to use the standard paid sick leave mandated under California’s Paid Sick Leave law, even when there has been a workplace exposure and the employer is required to exclude employees under the ETS.”

5. How to learn more about the ETS?

Cal/OSHA’s website provides various FAQs and materials for employers.  Cal/OSHA’s “Frequently Asked Questions Related to COVID-19” can be found here.

“Posters, Educational Materials, Model Programs and Other Resources Related to COVID-19” can be found here.

Cal/OSHA’s COVID-19 Model Prevention Program (updated January 14, 2022) which most employers are required to implement, can be found here.

This Friday’s Five focuses on five California employment related news items that got my attention this week:

1. California considering reinstating COVID paid sick leave in 2022.

As California’s supplemental paid sick leave expired in September 2021, and Governor Newsom decided not to extend it by executive order.  Now there are discussions of bringing COVID paid sick leave back, but there are still many questions about what this would look like, and who would be paying for it.  LA Democratic Assembly-member Wendy Carrillo is reported as intending to introduce a bill to provide for paid sick leave and will propose that the state use budget surplus money to pay for it.  Employers will have to watch to see how this issue develops.

Just as a reminder, California employers are currently required to pay for “exclusion pay” under the Cal/OSHA ETS which is, for the time being, in place until at least mid-April of 2022.

2. Employers still facing labor shortages and raising wages in 2022.

KTLA reports that “employees got about a 2.8% salary bump last year. At the beginning of 2022, companies were considering about a 3% raise, but are now looking at about 3.4%.”

3. California appellate court permits family member’s lawsuit to proceed against employer for injuries from employee allegedly bringing COVID-19 home from the workplace.

As set forth by the court, “Plaintiffs allege that Mrs. Ek, defendants’ employee, contracted COVID-19 at work because of defendants’ failure to implement adequate safety measures. They claim that Mr. Ek subsequently caught the disease from Mrs. Ek while she convalesced at home. He died from the disease a month later.” The court rejected defendant’s argument that the case was barred under the Workers’ Compensation Act derivative injury doctrine and will permit the lawsuit to proceed.  See’s Candies, Inc., et al. v. Superior Court of Los Angeles (Matilde Ek et al.)

4. 5 things to know about ordering free COVID tests (LA Times).

The LA Times provides some insights into the free COVID tests: the process is simple, plan ahead, and don’t just take the test for kicks.

5. CalSavers program is rolling out to smaller employers in 2022, and California has begun to issue citations for large employers who have not already complied.

California employers are required to register for the CalSavers retirement savings program.  Employers with over 100 employees were required to register by September 30, 2020, employers with more than 50 employees were required to register by June 30, 2021, and employers 5 or more employees must register by June 30, 2021.  The state has begun to issue citations, which start at $250 per employee, and can increase to $500 per employee.

On January 14, 2022, Cal/OSHA published fact sheets and updated its FAQs on COVID-19 Prevention Emergency Temporary Standards (ETS).  The fact sheets clarify the isolation and quarantine requirements for employers and employees (the image above is a portion of the fact sheet published by Cal/OSHA).  A major clarification from Cal/OSHA set forth that employees who are booster-eligible, but who have not yet received the booster, if exposed to someone with COVID-19 they do not need to quarantine as long as they are asymptomatic and must receive a negative test 3-5 days after the close contact.

Cal/OSHA’s updated FAQs can be found here.

The fact sheets can be found here: